INVESTMENTS

Investments of the Company’s insurance subsidiaries are subject to the insurance laws of the state of their incorporation. These laws prescribe the kind, quality and concentration of investments that may be made by insurance companies. In general, these laws permit investments, within specified limits and subject to certain qualifications, in federal, state and municipal obligations, corporate bonds, preferred and common stocks and real estate mortgages. The Company believes that it is in compliance with these laws.

The amortized cost and estimated fair value of securities available-for-sale as of June 30, 2018 and December 31, 2017 are as follows. All fixed maturity securities are classified as available-for-sale and are carried at fair value.



June 30, 2018	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair values
($ in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair values
Securities available-for-sale:
Fixed maturity securities:
U.S. treasury	$	8,127	$	—	$	213	$	7,914
U.S. government-sponsored agencies	305,833		519		10,128		296,224
Obligations of states and political subdivisions	278,869		11,448		587		289,730
Commercial mortgage-backed	78,977		222		3,523		75,676
Residential mortgage-backed	131,427		1,772		4,669		128,530
Other asset-backed	22,325		351		1,005		21,671
Corporate	422,159		3,208		3,413		421,954
Total fixed maturity securities	$	1,247,717	$	17,520	$	23,538	$	1,241,699



December 31, 2017	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair values
($ in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair values
Securities available-for-sale:
Fixed maturity securities:
U.S. treasury	$	8,115	$	—	$	37	$	8,078
U.S. government-sponsored agencies	303,932		122		6,105		297,949
Obligations of states and political subdivisions	290,038		17,729		231		307,536
Commercial mortgage-backed	84,058		591		669		83,980
Residential mortgage-backed	120,554		2,479		3,234		119,799
Other asset-backed	23,934		625		445		24,114
Corporate	422,535		11,490		465		433,560
Total fixed maturity securities	1,253,166		33,036		11,186		1,275,016

Equity securities:
Common stocks:
Financial services	30,103		13,594		175		43,522
Information technology	18,308		17,504		2		35,810
Healthcare	18,877		11,876		158		30,595
Consumer staples	9,275		4,917		65		14,127
Consumer discretionary	10,935		9,640		37		20,538
Energy	12,441		5,381		917		16,905
Industrials	12,746		15,757		14		28,489
Other	11,058		5,363		—		16,421
Non-redeemable preferred stocks	20,531		1,216		39		21,708
Total equity securities	144,274		85,248		1,407		228,115
Total securities available-for-sale	$	1,397,440	$	118,284	$	12,593	$	1,503,131

The following tables set forth the estimated fair values and gross unrealized losses associated with investment securities that were in an unrealized loss position recognized in accumulated other comprehensive income as of June 30, 2018 and December 31, 2017, listed by length of time the securities were consistently in an unrealized loss position.



June 30, 2018	Less than twelve months				Twelve months or longer				Total
($ in thousands)	Fair values		Unrealized losses		Fair values		Unrealized losses		Fair values		Unrealized losses
Securities available-for-sale:
Fixed maturity securities:
U.S. treasury	$	7,914	$	213	$	—	$	—	$	7,914	$	213
U.S. government-sponsored agencies	187,074		5,498		75,882		4,630		262,956		10,128
Obligations of states and political subdivisions	12,195		60		14,002		527		26,197		587
Commercial mortgage-backed	60,331		2,750		8,193		773		68,524		3,523
Residential mortgage-backed	97,256		2,616		18,781		2,053		116,037		4,669
Other asset-backed	4,976		122		12,134		883		17,110		1,005
Corporate	195,886		3,227		3,998		186		199,884		3,413
Total fixed maturity securities	$	565,632	$	14,486	$	132,990	$	9,052	$	698,622	$	23,538



December 31, 2017	Less than twelve months				Twelve months or longer				Total
($ in thousands)	Fair values		Unrealized losses		Fair values		Unrealized losses		Fair values		Unrealized losses
Securities available-for-sale:
Fixed maturity securities:
U.S. treasury	$	8,078	$	37	$	—	$	—	$	8,078	$	37
U.S. government-sponsored agencies	134,284		1,491		127,604		4,614		261,888		6,105
Obligations of states and political subdivisions	—		—		14,416		231		14,416		231
Commercial mortgage-backed	32,155		221		8,530		448		40,685		669
Residential mortgage-backed	30,003		394		22,948		2,840		52,951		3,234
Other asset-backed	—		—		13,440		445		13,440		445
Corporate	28,314		329		4,047		136		32,361		465
Total fixed maturity securities	232,834		2,472		190,985		8,714		423,819		11,186
Equity securities:
Common stocks:
Financial services	4,391		175		—		—		4,391		175
Information technology	344		2		—		—		344		2
Healthcare	2,532		158		—		—		2,532		158
Consumer staples	575		65		—		—		575		65
Consumer discretionary	992		37		—		—		992		37
Energy	3,181		917		—		—		3,181		917
Industrials	3,016		14		—		—		3,016		14
Non-redeemable preferred stocks	—		—		1,961		39		1,961		39
Total equity securities	15,031		1,368		1,961		39		16,992		1,407
Total temporarily impaired securities	$	247,865	$	3,840	$	192,946	$	8,753	$	440,811	$	12,593

Nearly all of the fixed maturity securities that are in an unrealized loss position are considered investment grade by credit rating agencies. Because management does not intend to sell these securities, does not believe it will be required to sell these securities before recovery, and believes it will collect the amounts due on these securities, it was determined that these securities were not “other-than-temporarily” impaired at June 30, 2018.

The amortized cost and estimated fair values of fixed maturity securities at June 30, 2018, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations, with or without call or prepayment penalties.



($ in thousands)	Amortized cost		Estimated fair values
Securities available-for-sale:
Due in one year or less	$	39,947	$	40,411
Due after one year through five years	207,717		208,900
Due after five years through ten years	366,053		362,780
Due after ten years	422,003		423,852
Securities not due at a single maturity date	211,997		205,756
Totals	$	1,247,717	$	1,241,699

A summary of realized investment gains and (losses) and the change in unrealized investment gains on equity investments is as follows:



	Three months ended June 30,						Six months ended June 30,
($ in thousands)	2018			2017			2018			2017
Fixed maturity securities available-for-sale:
Gross realized investment gains	$	—		$	289		$	234		$	379
Gross realized investment losses	(5,490		)	(880		)	(5,968		)	(2,086		)

Equity securities:
Net realized investment gains, excluding "other-than-temporary" impairments	1,479			6,026			4,195			8,802
Change in unrealized investment gains	(447		)	XXXX			(10,301		)	XXXX
"Other-than-temporary" impairments	XXXX			(733		)	XXXX			(733		)

Other long-term investments, net	(1,402		)	(1,315		)	587			(3,602		)
Totals	$	(5,860	)	$	3,387		$	(11,253	)	$	2,760

Gains and losses realized on the disposition of investments are included in net income. The cost of investments sold is determined on the specific identification method using the highest cost basis first. The Company did not have any outstanding cumulative credit losses on fixed maturity securities that have been recognized in earnings from “other-than-temporary” impairments during any of the reported periods. The net realized investment gains (losses) recognized on other long-term investments primarily represent changes in the carrying value of a limited partnership that is used solely to support an equity tail-risk hedging strategy.